“Oh, that’s for the Technology team to sort out now, Sales have done their bit” … Is this true?
Hi there, I am Szu and I am part of the executive search team in EO Executives who identify and place the best and brightest talent for the C-level/VP roles we have. Previously, I worked with IT Services companies in solutions & product development. At HPE, as part of my MSc in IT, I worked in the global cloud services team to help design a cloud Integration platform for small & medium-sized independent software vendors. At CSC, I led the R&D part of the solutions development function to deliver new IaaS/SaaS offerings.
As part of EO Executives’ survey of over 100+ industry leaders (CTO’s and Commercial Directors) to understand how aligned sales and technology teams are in modern business, we kicked off a theme blog “Are Sales and Technology Pulling in Different Directions?” From this EO article, I started off a spin-off series of blogs talking about why alignment between the Sales and Technology leads is so crucial the at all stages of the SaaS life cycle:
• The Service Development stage,
• The Service Go-to-Market stage,
• The Service Implementation stage, or,
• The post-implementation Service Enhancement stage
On my 2nd blog, I touched on the Service Go-to-Market stage (in the context of SaaS), and highlighted some common frictions that can exist between the Sales Lead/CSO’s and the Technology Leads/CTO’s at the launch and front end selling phase, and shared some recommendations and best practice to overcome the issues. (Read more here)
In this final blog to my SaaS life cycle series, I will talk about why continued alignment between the Sales and Technology leads continues to be very important in both the SaaS Implementation and post-implementation stages.
At this SaaS implementation stage, it is the Technical Lead and his team that takes over the process and deals directly with the SaaS customer. A common situation the technical team may find themselves in their dealing with the customer, is that the customer has higher expectations of what the SaaS product can deliver – compared to the actual reality of what the SaaS actually does deliver. This leads to client disappointment and an incredulous SaaS technical implementation team who usually exclaims to the customer at this stage … “Our sales person promised you what??! And by when?!”
At this point, the SaaS sales person would have collected his commission from the sale of the SaaS product, moved on, and left the technical team to manage any potential headaches that arises at the solution implementation stage. The SaaS Sales person may not have appreciated the complexity in the migration of data from the existing customer software to SaaS, or, the identification of the critical data and customer-side business processes to carry out a successful implementation. So the time, effort and costs quoted to the customer for the implementation may have been far too low, which results in a resentful technical team having to work all hours to meet an impossible implementation deadline, as well as deal with unexpected implementation issues … causing the actual profit of the SaaS vendor to be eroded due to having to dedicate far more time & resource of the SaaS technical team to carry out the implementation.
To prevent common situations like these from happening, there are some best practices to be considered:
• As part of the sales stage, technical scoping should be duly and properly carried out by the Technical Lead/team in parallel to realistically work out the time, effort and cost to: migrate data; integrate process, data and systems; as well as, work out testing efforts required to ensure systems compatibility, data security, data accessibility and SaaS performance satisfaction. It is highly important that both the Sales Lead and the Technical Lead work together to realistically cost out the implementation work & resources required, and provide the customer with a more accurate quote for work to be done.
• The Sales Lead and their team need to have their sales commission staggered as such that they get a portion paid upfront for clinching the sale, and the remaining portion paid only upon a “reasonable” successful implementation of the SaaS product to the time, effort & cost quoted. This will hold the sales lead/team accountable to realistic pricing and fair, achievable timescales in their sales bid proposition to the customer. Of course, in the real world, we can never estimate work and costs needed 100% accurately, as hiccups and unexpected issues often arise despite best efforts to pre-empt these situations.
The post-implementation SaaS enhancement stage - adding new features and functions
SaaS vendors normally tend to upgrade their software (including adding new functionalities) based on reasons such as: current market trends, popular customer requests, new technology requirements, or, simply to out compete other SaaS rivals and garner more market share. Such upgrades tend to be available free of charge at the next version.
However, every new functionality added requires coding development and further testing, and then providing further IT support for the new functionality. If a SaaS provider decides to build a new feature to satisfy requests from a few key customers (which is usually one of the top reasons for SaaS upgrades), they should consider if other customers might use the new functionality as well, and whether it’s really worth the cost of building that functionality as well as the downstream costs to provide additional IT support for it.
It is not uncommon to find that new unexpected issues occur after you have launched and implemented a new SaaS upgrade - bugs and systems complications or incompatibilities often rear their ugly heads, and the very customers who requested the new functionality (that the SaaS vendor has just painstakingly built for them) may end up asking to revert to the previous SaaS version, and consequentially causing much frustration for the SaaS vendor. Even worse, the SaaS provider may not be able to recover the cost of building that new feature – which eats into their bottom line margins.
As such, yet again the Technical Lead and the Sales Lead need to continue working together in unison at the post-implementation SaaS enhancement stage – to continually manage their customers’ expectations, to weigh up the business profitability of adding new features or functions, as well as, to consider any risks that might arise from adding new features (e.g. new bugs that may lead to software vulnerability or data security issues, systems overloading, etc) that may impact the SaaS vendor(or their customers) negatively.
As we conclude the final part to my blog series on why alignment between the Sales and Technology leads is so crucial the at all stages of the SaaS life cycle, I would to emphasise that as I have just highlighted a few areas for thought in my three-part blog … not all areas have been covered in this topic, or as in-depth as could have been.